Breaking Your Lease Agreement Early

If you need to move out...there are certain steps you can take to minimize your financial obligations.

There are many cases where your plans may change or events may occur that make your continued stay for the duration of the lease difficult or impossible to achieve. A lease is a legal document signed by you and the landlord, which obligates you to pay rent for the entire term of the lease (usually one year).

There are, however, several situations where tenants can break the lease agreement with the landlord without being liable for the remaining rent. Job transfers, changes in living arrangements, unforeseen emergencies and a general dissatisfaction with the property are all common reasons why tenants may choose to find ways in which they can break their lease agreement. But because the lease is a legally binding document, specific steps should be followed when breaking a lease.

Why you Would Want to Cancel your Lease

Reasons for breaking a lease agreement can be classified into 2 main categories: legally justifiable reasons, and reasons that are based on preference and are not legally justified.

Reasons that are Legally Justified

There are several legally justifiable reasons for moving out before your lease agreement is over. If you move out under these circumstances, you will not be responsible for the remaining rent.

Tenants who are no longer able to live independently due to old age or medical conditions.

Tenants who have been called for active military duty

An unsafe rental unit that violates the state's health and safety codes

Many personal reasons for moving out mid-lease are not legally justified reasons for breaking a lease. The lease is a legal document that you willingly signed with the landlord, knowing that it would last for the next year. You are therefore obligated to pay rent for the duration of the lease. However, unforeseen circumstances such as job transfers and changes in living arrangements may still make a compelling reason for you to move out in the middle of your lease.

Such situations call for the landlord to take reasonable steps towards re-renting the property before they can hold you legally liable to pay the rent for the remaining duration. Commonly referred to as "the landlord's duty to mitigate damages", most states offer some protection to tenants when they move out mid-lease by requiring landlords to take active steps towards finding someone else to live in the property.

In Michigan, the law states that landlords should make reasonable efforts to re-rent the property, and they can only hold you liable to pay rent for the months that they made a loss because of you moving out early. However, the landlord can still maintain the same standards for renting the property; such as credit requirements, fair market value and renting history.

If the landlord cannot find someone else to rent the property to, and you don't fulfill the obligations of the lease, you can be sued in a small claims court for up to $5500.

Ways to Cancel the Lease Agreement

If you need to move out for reasons that are not legally covered, there are certain steps you can take to minimize your financial obligations.

Look for Loopholes in the Lease

The lease agreement may have certain stipulations for ending your lease early. They may offer options for subletting the residence or early release options if you can provide advanced notice.

Communicate with your Landlord

Depending on your relationship, the landlord can understand the reason as to why you need to move mid-lease. They can work with you to find a new renter or to mitigate expenses that both of you would need to incur. Keeping your landlord informed early enables them to prepare themselves for the upcoming changes.

Find Someone to Take Over your Lease

This is one of the most common ways of breaking a lease agreement. Both you and your landlord can find another renter who is either willing to take over your lease as it currently stands (subletting), or starting over with a brand-new lease (re-renting). If you can find someone who meets the necessary requirements and is willing to replace you after you leave, you can enjoy minimum to no financial repercussions for breaking your lease.

Termination Fees

If your back is against the wall and you need to move immediately, you may consider termination fees offered in the lease. Most agreements require you to pay 2-3 months' rent and forfeit your security deposit. This may be an option-to-consider-if-all-other-avenues-fail.